Innovator’s Dilemma

In 1997, Clayton Christensen wrote a book that coined the term “innovator’s dilemma”.

In his book, he described how industry-leading companies eventually fall behind by putting too much emphasis on customers’ current needs, and failing to adopt new technology or business models that will meet customers’ future needs. The “dilemma” is the need to choose between getting better at what you already do vs. creating a new way of doing business for the future.

Customer Lobby’s Dilemma

Today, Customer Lobby is the largest and most successful company in the “review generation, syndication and management” industry focused on service businesses. Things are going great for us right now. We are growing, successful and having fun doing it. No complaints.

However, a couple of years ago, the innovator’s dilemma became very real for us. Yes, customer reviews are becoming more important in buying cycles. However, we believe that reviews, how they are generated, consumed and managed will change substantially over time. Our long-term vision of how successful businesses will communicate with their customers (from reviews/feedback to various forms of marketing) requires us to change the services we offer to our customers. These changes require a very different solution than we currently offer.

The challenge for us (and for other businesses facing an innovator’s dilemma) is that we want to find a way to be great at our core business today and still create what we need to position ourselves for the future. It feels like doing upgrades to an airplane while its still flying.

Our solution to the innovator’s dilemma is to change what we do. For nearly 2 years, we have been changing our product from the inside out. Last week, we released a new version of our product that removed some features and added others. However, what was visible in our recent release was a small fraction of the changes we have made over the last 18-24 months. Most of the work we have been doing has been to enable us to launch a series of products that will be available over the next 12-18 months.

We believe that we are on a path to create something truly remarkable. Stay tuned for many more announcements from us.

Never Done

It’s never done. That has been one of my key take-away lessons from this process so far. As soon as a product is built, it is becoming obsolete. When you think you are great at delivering a service to your customers, there is a still a better way. Even now, in re-imagining how businesses might communicate with their customers, I can see how data and technology will keep revolutionizing how it happens for many years to come.

The insight I am left with after reviewing our multi-year process is that the “innovator’s dilemma” is not a dilemma faced by innovators but a choice to continue to innovate or slowly become less relevant that every business faces. That’s because, what ever you are doing, you know that there is a way to do it better and, eventually, someone will.